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Clinton Gives Details of His Urban Aid Plan

September 17, 1992|DAVID LAUTER | TIMES STAFF WRITER

Campaigning at a job training program in South-Central Los Angeles Wednesday, Democratic presidential nominee Bill Clinton fleshed out his plans for urban aid and community redevelopment, calling for a four-year, $6-billion program to "let poor people participate in the free enterprise system."

The overall size of Clinton's community development program has been known since June, when he first unveiled his economic plan. But Wednesday's announcements, made at a rally at the Maxine Waters Employment Preparation Center, provided substantial new detail.

Clinton says he would pay for this program and others he has proposed with a mixture of tax increases on the wealthy and on some corporations, and defense cuts somewhat deeper than those President Bush has suggested. Critics charge his plan overestimates the amount of new revenue his proposed tax increases would bring in and underestimates the cost of the promises he has made.

After visiting South-Central, Clinton went on to speak at a Mexican Independence Day rally in Baldwin Park in the San Gabriel Valley. In the evening, he attended a Beverly Hills fund-raising party featuring Barbra Streisand at the home of movie producer Frederick W. (Ted) Field. The event was expected to raise more than $1.2 million for the Democratic Party.

The centerpiece of Clinton's urban proposal is a plan to establish as many as 100 community development banks that would provide loans to residents and businesses in inner-city areas. The plan would "bring free enterprise back to South-Central Los Angeles and the inner cities of America," Clinton told a crowd gathered at the employment preparation center. "People know they need independence, not dependence," he said. "They want a hand up, not a handout."

Clinton also endorsed a small but potentially controversial measure that opponents could charge fits more comfortably in the "handout" category. The plan would give welfare recipients and low-income workers an incentive to save by allowing them to place money in special savings accounts, similar to individual retirement accounts. They would then receive federal matching funds of up to $1,800 per year.

Families with income up to twice the poverty level could participate. Currently, the federal government defines as poor a family of four with an income below $12,674. Money in the accounts could be used for education, job training, purchase of a first home or for retirement.

Under current laws and regulations, families on welfare are penalized if they try to save money. Reversing that situation and helping people save money to better themselves would help get people off welfare, eventually reducing costs to the government, Clinton policy director Bruce Reed said. "It's a way to help people out of poverty," he said.

A written description of the program distributed by campaign officials notes that "the federal government spends billions to provide middle- and upper-income Americans with incentives to save--through home mortgage interest deductions and tax deductions for pension accounts." The new proposal would "provide the same incentives to low-income Americans," the statement said.

All plans that involve giving additional money to welfare recipients are likely candidates for political trouble. To reduce the opposition, the plan would start only as a "demonstration" project to test the idea with funds of $400 million over four years--enough to assist only a fraction of the number of people who would be eligible.

Providing new detail for Clinton's plans has been part of the campaign's strategy to give voters a clearer idea of the goals of a Clinton Administration.

The more detailed plan also demonstrates several of the strengths and weaknesses of the candidate's overall approach.

Clinton's stress on incentives for private-sector investment in inner-city neighborhoods marks a sharp change from the traditional methods associated with his party--direct infusions of taxpayer funds distributed by government agencies. Some of his ideas, in fact, are similar to those pushed by Jack Kemp, the Bush Administration's secretary of housing and urban development.

But Clinton shares with past Democrats a penchant for expansive rhetoric that at times contrasts sharply with the far more modest dimensions of the plans he has proposed.

"I do not want to win this election in 48 days simply in order to change my address and go to Camp David on the weekends. I want your life to change," he told his listeners at the employment center. With his proposals, he said, "we could revitalize South-Central Los Angeles in a very short time."

Racial tensions, he predicted, would be far less "if everyone thought that if they worked hard and played by the rules, they could get ahead."

Those who have worked in programs similar to the ones Clinton supports, however, paint a more limited picture.

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